Indian equity markets concluded the week with a decrease of more than 2.5%, attributed to profit-booking, ongoing outflows by foreign institutional investors (FIIs), and concerns over global trade disruptions related to US tariff discussions. All sectoral indices ended the week in negative territory, with Realty experiencing the most significant decline at 11.33%. Sectors like Consumer durables, telecom, and consumer discretionary also saw declines of over 5%.
Nifty recorded a 2.51% drop over the week and a further 0.95% decline on the last trading day, closing at 25,048. Similarly, the Sensex fell by 769 points or 0.94% to 81,537 at the week’s end, marking a 2.43% decrease overall. Broader indices fared worse, with the Nifty Midcap100 down by 4.58% and the Nifty Smallcap100 declining by 5.81%.
Bank Nifty wrapped up the week on a notably bearish note following a significant breach below the crucial 58,800 support level. Market analysts noted that while early-week sentiment received a boost from earnings upgrades in select IT and banking stocks, disappointments in later earnings reports, coupled with lackluster results from sectoral peers, dampened market spirits.
The week saw escalating geopolitical tensions, especially regarding the US administration’s strong stance on Greenland and tariff warnings, leading to a widespread sell-off in domestic equities. Additionally, concerns over rising global bond yields and uncertainties surrounding the US Supreme Court’s review of tariffs from the Trump era further curbed risk appetite.
Since the beginning of 2026, both the Sensex and the Nifty have seen declines exceeding 4%. The prevailing global risk-off environment has triggered substantial selling by foreign portfolio investors, who have divested equities worth over Rs 36,500 crore this month. The Indian rupee’s depreciation to nearly 92 per US dollar has raised worries about imported inflation.
Investors are closely monitoring signals from the upcoming Union Budget 2026 and seeking guidance from the Federal Reserve on the direction of interest rate adjustments. Analysts suggest that high FII short positions, oversold momentum indicators, and pre-Budget positioning might induce short-covering spurts. However, the sustainability of any market recovery is likely to hinge on global cues, earnings performance, and investor sentiment leading up to the Union Budget.
